Dive Brief:
- A group of investors led by New York-based MCR Hotels and its CEO and chairman, Tyler Morse, will take membership club Soho House private in a $2.7 billion deal, Soho House & Co. announced Monday.
- The investor group will acquire outstanding shares of Soho House & Co. as Executive Chairman Ron Burkle and the investment firm Yucaipa Companies roll their controlling equity interests into the membership club company, retaining majority control of the business.
- MCR, which claims it is the third-largest hotel owner-operator in the U.S., will make a “meaningful new money investment” into Soho House as a shareholder, per the announcement. Morse will join the company’s board of directors as vice chairman.
Dive Insight:
Affiliates of asset management business Apollo are supporting the $2.7 billion transaction through additional capital in the form of debt and common equity, according to Soho House.
Additional investors — including Goldman Sachs Alternatives and actor-turned-investor Ashton Kutcher, who will also join Soho House’s board of directors — will provide further capital. The company’s existing shareholders will also roll the majority of their shares of the company’s stock.
“This transaction reflects the strong confidence our existing and incoming shareholders have in the future of Soho House & Co., and the transformation we’ve led since becoming a public company,” said Soho House CEO Andrew Carnie in a statement.
The company held its initial public offering in 2021. Since then, Carnie added, the firm “delivered consistent, disciplined growth with revenue increasing at an average annual rate of double digit growth” despite “challenging economic conditions and global uncertainty.”
Soho House, which first opened in 1995, has expanded globally since going public, adding locations in Sao Paulo, Mexico City, Paris and Nashville, Tennessee, in recent years. According to Carnie, going private “enables us to build on this momentum.”
Morse said MCR’s investment “represents a strategic opportunity to combine our operational expertise with one of the most distinctive brands in hospitality.”
The 2006-founded hotel investment firm currently commands a $5 billion portfolio of 150 premium-branded hotels, including Sheraton New York Times Square, The High Line Hotel and The Gramercy Park Hotel in New York.
Soho House, which describes itself as “a global membership platform of physical and digital spaces,” currently has 46 Soho House locations globally. In the U.S., that includes properties in New York; Austin, Texas; Chicago; Portland, Oregon; Nashville; Los Angeles; and Miami.
